We expect the spring 2016 Atlanta area real estate market to continue the strong seller’s market of the last few years. Things turned on a dime, literally, in the last quarter of 2012. A bottom was reached and the first two quarters of 2013 saw a meteoric jump in activity and prices and a seismic power shift to sellers. This caught many buyers flatfooted while sellers rejoiced and exploited their sudden success. Buyers on the other hand, are stubbornly realizing that their window has closed, for now at least. Successful buyers are the ones that acknowledge this market and buy with value in mind. It’s not unlike a game of musical chairs, many butts and very few seats.

So what are we forecasting for the first half of the Atlanta real estate market in 2016? The likely answer lies in looking at key data points from the last three years. The focus is on four areas: Alpharetta, Marietta, Roswell and Sandy Springs. The data is broad and all inclusive, not specific by micro market. That said, trends are generally similar so we are comfortable looking at this strategically. More specific housing market data for 15 Atlanta markets and over 100 zips is also available.

Market Action Index – MAI
2016 real estate market

Measurement of several statistics that compare demand levels relative to supply levels. Proprietary Altos Research methodology. Above 30 demand is robust to indicate “Sellers Market”. Below 30 indicates weak demand or “Buyers” opportunity markets. This provides a single, at-a-glance answer to, “How’s the Market?” and provides real time visibility to supply and demand trends in a market. This stat is useful when examining trends to indicate if a market is weakening, mixed, or strengthening over time. The move to a seller’s market during late ’12 into ’13 is clear in all markets. We see the strongest seller markets during the summer, buyers gaining ground during the slower winter months. The peaks over the last three years are clear. Expectations are for this pattern to continue into 2016.

Median Price
Atlanta Area Real Estate Market Forecast

The sales price at which half of all sales are above and half of the sales are below. When you have outliers in the underlying data, using the median is often more reflective of the “true” trend. Again, there are many variables when looking at unfiltered area data, but prices have been recovering from the bottom found during the crash. There are many influences here such as new homes, REO and distressed sales, as well as the unique price points and characteristics of each submarket. With ebbs, flows, peaks and valleys, seasonal fluctuations are expected. In short, it is accurate to say that prices in these areas are up. It is not reasonable to say they are up X% based upon this chart. This is the fundamental flaw with Case-Shiller and other reports; the data is too varied. In this case we are more accurate than Case-Shiller as we’re down to city level, but the best look comes from an appraisal level analysis.

Total Inventory
real estate market forecast

Total active inventory includes those properties that were active at the end of the time period. Much has been said about the “lack of inventory” holding back the market, but these charts don’t necessarily agree. All areas dropped as the market shifted in early ’13 and all peaked in the summer of ’14. However when comparing “then” to “now” we see just slight decreases in Alpharetta and Marietta, generally the same inventory in Roswell and a slight increase in Sandy Springs. Seasonal swings are clearly there and expected. We see that the quality listings, those priced and presented right, tend to attract a lot of action (seller’s market) and those tend to fly off the market. We hear “I can’t find a house” quite often, but that isn’t always the problem. We find them but the problem is accepting that another buyer is going to acknowledge the current market and pay more.

Median Days on Market
atlanta real estate market 2016

This metric group covers 3 different metrics related to the average time a listing is on market prior to settlement: days to contract, days contract to settle, and days to settle. Wild seasonal swings across all cities, are not entirely unexpected. Slow markets in the fall and winter give way to hot markets in the spring and summer. Note that even at the highs, the medians in these markets are 110 days or less with lows in the 45 range. This is another indicator of how sellers with desirable homes are getting attention and it’s also another indicator for buyers as they decide whether or not to pull the trigger.

Median Sale to List Price Ratio
2016 housing market trends

The above chart depicts median sold price to last list price ratio for homes sold in a given period. This represents the middle ratio of the gross sales price to the final list price (at time of contract) across the series. The similar tracts here show that homes through ’15 are selling for just over 97.5% of list price. This demonstrates strength in these markets as successful buyers are paying very close to list price. For buyers expecting to buy homes 15% – 20% off the list price, it’s probably not going to happen easily and most likely will be with homes that have been on the market an extended time due to some issue(s).

2015 housing market trends that should play out in the spring:

Sellers will likely remain in control. The grip may loosen a bit but not to the point where buyers call the shots.
Prices will bump in the spring and early summer, sellers will probably enjoy the seasonal spike.
The appealing, well priced and well presented homes will sell quickly for close to or at list price and a few will go over.
As usual, prepared buyers with a definition of success will find and purchase homes.
Bargain hunters will continue the rough road; the “good” homes will not be on their lists.
These projections are based upon the assumption that current conditions will be more or less in place through the first part of 2016. The huge variable is the Fed and a rate increase. We don’t expect they will raise anything until after the holidays and then only after a review of the holiday spending and other indicators. If this economy remains stagnant, perhaps this is the new norm.